2015 Annual Report AARP Services

2015 AARP SERVICES ANNUAL REPORT

OUR MISSION To inspire new and innovative business practices, guide consumers to make informed choices, and deliver products and services that better fulfill life-stage needs.

WHO WE ARE AARP Services is a unique advocate for consumers in the marketplace. We strive to make businesses more responsive and attentive to the dynamic 50-plus population. AARP Services, founded in 1999, is a wholly-owned taxable subsidiary of AARP.

WHAT WE DO The primary role of AARP Services is to provide quality control, on AARP's behalf, for the products and services made available to AARP members by leading businesses. The AARP Services staff: >>Researches what people 50-plus want

and need;

>>Negotiates special features uniquely suited for consumers 50-plus, as well as differentiated value;

>>Monitors providers of commercial offers to AARP members to improve customers' experiences, particularly their overall satisfaction, ease of doing business, and the timeliness and accuracy of offers; and

>>Provides consulting services to outside companies.

SOCIAL IMPACT AARP's extensive social-change efforts are primarily supported by the royalty income that AARP receives from licensing its brand to third-party service providers.

MARKET INFLUENCE Just as AARP's founder shook up the marketplace in the 1950s with pioneering group health insurance and a mail-order pharmacy, AARP Services is leveraging market forces to help people live healthier, more secure and happier lives.

Contents

LETTER FROM THE PRESIDENT & CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 HEALTH PRODUCTS & SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 INNOVATIONS IN CAREGIVING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 FINANCIAL PRODUCTS & SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 SAVING PEOPLE MONEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CREATING A MORE RESPONSIVE MARKETPLACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 PROVIDERS SUPPORT AARP'S MISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2015 AARP SERVICES, INC. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2015 AARP SERVICES, INC. EXECUTIVE TEAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2015 REVENUE GROWTH SUPPORTS AARP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

LETTER FROM THE PRESIDENT & CEO

The AARP brand remains one of our most important assets. When people use the products and services made available to AARP members by leading businesses, it helps bring our brand to life. That's why it's so important for AARP Services to constantly monitor quality, making sure that providers deliver what is promised, in the ways that best serve the 50-plus population and help improve the marketplace. In a virtuous cycle, the royalties AARP receives from providers for the use of AARP's name make a significant contribution to "fueling" the social mission of AARP.

The enduring popularity of Medicare supplement insurance, prescription drug programs and other health offerings that merit the AARP name are a testament to their quality and value. To help fill a market gap, we negotiated a robust offering via AARP Long-Term Care Options from New York Life.

More broadly, a major strategic focus

for AARP Services in 2015 was meeting the needs of family caregivers who assist loved ones with meals, errands, doctor visits and much more. In the short term, we negotiated an AARP-member discount on healthy, home-delivered meals through Silver Cuisine by BistroMD.

For the longer term, AARP Services began channeling promising caregiving-related ideas from the drawing board to market testing. This test-and-learn approach seeks to ensure that a range of health products, personal services and technological advancements meet the needs, expectations and budgets of real people.

Another way we sought to serve consumers' needs was by helping a host of businesses and nonprofits understand the diverse 50-plus population better. The 100 million Americans in this age group are curious, service-oriented consumers willing to try new things. Too often, though, companies turn them off with stereotypical

ads and language. In its second year, our full-service agency--Influent 50--leveraged sophisticated marketing and digital analytical services to help more than two dozen companies reach consumers more effectively.

In my first full year as president and CEO, I took particular pride in rallying dozens of providers to advance AARP's social mission through philanthropic efforts and hands-on involvement at the local level. Highlights of those engagements, from packing millions of meals for hungry adults to helping people learn how to use smartphones, are found in this report.

Our entire staff remains committed to increasing the value of AARP membership, driving positive social change and delivering financial results to AARP so that it can successfully improve the quality of life for all as we age.

Lawrence P. Flanagan

President & CEO

For AARP Services, 2015 showcased the

impact of listening carefully to the

people we serve, zeroing in on what's

missing in the marketplace and delivering the bestin-class products

they deserve.

2015 AARP SERVICES, INC. ANNUAL REPORT 3

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